A Virtual Hotbed of Outsourcing Innovation at Procter & Gamble | Article

2013 Outsourcing Excellence Award Winners: The Procter & Gamble Company and Accenture2013 Outsourcing Excellence Awards MOST INNOVATIVE: The Procter & Gamble Company and Accenture

“We’ve married P&G’s knowledge with Accenture’s expertise to create a partnership in which one plus one equals five.”

Patrick Kern, Director of Business Intelligence, Global Business Services (GBS), The Procter & Gamble Company

It is hard to imagine anyone on planet Earth who hasn’t heard of The Procter & Gamble Company (P&G) or hasn’t purchased one of its many brands. This global consumer goods giant has operations in 75 countries worldwide and touches the lives of close to 4.6 billion people with its products, which range from paper towels to razors, from batteries to toothpaste and near everything in between.

Of course, product mix alone isn’t enough to maintain leadership status is today’s highly competitive consumer goods market. To stay on top, P&G continually looks for ways to increase agility, speed time-to-market, and strengthen its connection with retailers and consumers.

One great example is the company’s use of virtual solutions. Instead of building out physical locations configured as each retailer’s storefront, P&G leverages virtual reality centers around the world, used to create, test and optimize packaging, shelving,   in-store design, and purchase intent.

“In the past, a test group of consumers would go into a physical space we configured like a grocery store to go on a shopping experience. Watching their behavior in store and conducting a focus group after, we’d learn why they chose what they chose, and how packaging and shelf position impacted their buying decision. You can imagine how expensive it is to put up these stores, from setting up shelves for different configurations to getting all the product there,” explained Patrick Kern, director of business intelligence for P&G’s Global Business Services (GBS) group, a holistic shared services organization within the company. “Now, we’ve replaced the physical locations with a virtual solution space that lets shoppers have the same experience in a lifelike, 3D virtual environment. Not only is this equally effective and less expensive, but it also enables us to change store configurations for our different retailers quickly, and aggregate data more efficiently.”

Although these virtual solutions provided great value, service delivery was fragmented. Planning and research was managed internally, while individual solution components—from application development to studio design—were handled by a multitude of different providers.

A Unique Approach to Outsourcing

“We believed we could improve quality, reduce costs and increase flexibility if we transitioned our end-to-end global service delivery to one trusted outsourcing partner—even though these services are something most companies don’t traditionally outsource,” Kern explained. “By consolidating our virtual services delivery into a single strategic mechanism, we could create solid processes and management services that could scale globally. It would also create a launch pad for innovative, new service capabilities that would support an expanded, digital culture at P&G.”

Of course, finding the right outsourcing partner was paramount to their success.

“Accenture was our clear choice for a number of reasons. They were already a proven P&G BPO provider and recognized industry leader with the global scale a company of our size requires. Accenture also understood large-scale virtualization and content management like no one else,” Kern said.

Under a multi-year contract, Accenture worked closely with P&G GBS to transition, and ultimately manage, P&G’s virtual solutions content delivery and facilities service. It’s an engagement that has grown incrementally from day one, resulting in a collaborative relationship that leads the way in digital innovation.

“We’ve married P&G’s knowledge with Accenture’s expertise to create a partnership in which one plus one equals five,” Kern said.

A Win-Win Strategy that Makes It All Work

Early in the relationship, the companies established a joint Innovation Council, tasked with exploring new virtual reality technologies and determining how these could be applied to the P&G environment.

“You can’t have a customer-vendor, win-lose relationship and accomplish anything. It has to be a win-win to get results,” Kern said. “For example, when we develop an innovation, we help Accenture co-commercialize it to non-competing companies. That helps Accenture succeed, but it also helps us. The more people who use the innovation, the more that product or service is refined. Ultimately, that evolves the idea into something better than it originally was.”

One good example of this collective innovation in action is the creation of the Decision Cockpit—a comprehensive, global business portal that enables multi-disciplinary teams to collaborate, interact and have one place to go for the information they need to do their jobs.

“When we built the Decision Cockpit 10 years ago, no one had anything like this. Instead of piecing together information from multiple sources, the Decision Cockpit enabled our global teams to share real-time data in one place and analyze that data,” Kern explained. “Accenture had the know-how to help us scale it, and embed measurements within the portal itself. That gave P&G the kind of agility that companies of our size rarely have, and the consolidated data resources and business intelligence we needed to make better, faster, real-time business decisions.”

In some business areas, the Decision Cockpit condensed 370 daily and monthly tracking reports down to just 30—all online and available in real time. Overall, this initiative reduced reports and touches by 50 to 70 percent, reduced costs by as much as 50 percent in some markets, and saved more than 400 miles of paper each year.

Most recently, the P&G/Accenture team launched a “Project Management as a Service” initiative.

“We have always maintained project management in house.  With our Project Management as a Service model, Accenture SMEs handle project management end-to-end for us, as needed,” Kern said. “This model gives us the agility to respond to surges—particularly acquisitions,  divestitures, or unplanned business emergencies. We gain the ability to flex in and out like an accordion—something we couldn’t do internally with hiring timeframes and staffing constraints. With Accenture, we can also gain expertise and new capabilities that we don’t have, so there’s no long ramp-ups or lag time.”

The Communication Continuum

While it’s true that both P&G and Accenture are outstanding companies on their own, it’s the mindshare and open communication that’s made this partnership so successful.

“We operate off of a joint business plan that we created together, so everyone is singing from the same sheet of music,” Kern said. “It’s our roadmap, so everyone on the team understands our objectives, our priorities and where we want to go. I think, as a customer, it’s your job to know what you want to accomplish and communicate that whole vision to your partner.”

He also makes sure the team never hears information second-hand.

“We treat Accenture as our equal. They sit on the project board so everyone gets the same information at the same time,” Kern said. “We have an account manager on site and stay engaged daily. We function as one, well-oiled machine.”

According to Kern, transparent, honest, real-time feedback is critical to this partnership’s success. And, that honesty goes both ways.

“Most vendors won’t tell us when they think we’re making the wrong move or need to go in a different direction. Accenture is not afraid to push beyond the comfort zone. They don’t just do what we ask,” Kern said. “They’re honest with us, and we value their opinion, and I’m sure they’ve saved us from making a mistake. To me, that’s a true partnership.”

By leveraging innovative business processes on an outsourced basis with Accenture, P&G has achieved scale, agility and the speed to transform its business.

Look for more innovation to come.

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